Cheesecake Factory is shedding its fatty ways
Known for gooey, calorie-laden desserts, it's turning to arugula and wraps to thin down.
A revolution is going on at the Cheesecake Factory (CAKE), and apparently it's as popular with certain diners as baby arugula is with localvore foodies.
The restaurant chain, known for fat-laden slices of cheesecake, is finding success with its SkinnyLicious menu, particularly among baby boomers, CEO David Overton said Wednesday on the company's earnings call.
The menu, introduced in 2011, is "doing well. And many people, again especially baby boomers, that still go out to restaurants quite a bit really appreciate it," Overton said.
So what's on the SkinnyLicious menu? It includes items that might be more at home at a Berkeley, Calif., localvore restaurant, such as grilled artichokes, fresh-baked flat breads and, yes, an arugula salad.
Second-quarter comparable restaurant sales (sales at locations open for at least one year) rose by just less than 1% at Cheesecake Factory's outlets. While that was less than some investors had hoped for, the company's shares have gained almost 25% this year.
Appealing to baby boomers may be paying off, given that they and older consumers have increased their restaurant visits during the past five years while millennials have cut back, according to research from NPD Group that Bloomberg Businessweek cited.
But restaurants have had a bit of a rocky year, suffering a slowdown. McDonald's (MCD) reported second-quarter results that were a disappointment for shareholders, while Panera (PNRA) shares dropped after the company missed earnings estimates and cut its full-year outlook.
The bottom line may be that diners -- from budget-conscious McDonald's fans to more free-spending Cheesecake Factory patrons -- may still have a belt-tightening mentality. A recent poll found that more than half of Americans believe the country is still suffering from a recession.
But Cheesecake Factory may be hitting upon a recipe for success with its SkinnyLicious approach. After all, once done tucking in healthy-sounding menu options (ahi tartare, anyone?), boomers might not feel so guilty about splurging on a piece of cheesecake.
Follow Aimee Picchi on Twitter at @aimeepicchi.
The portions on their menu are almost twice the size of a recommended portion. Take half your meal home!
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